Exxon Is Not Threatened by Tesla

Written by Joe Carroll. This article first appeared in Bloomberg Technology. 

Exxon Mobil Corp. says the existential threat to oil producers from electric cars is overblown.

Despite concern that electrification will render obsolete the gasoline-fueled internal combustion engine, the world’s biggest crude explorer says the 158 year-old oil industry won’t go gentle into that good night.

The electric-vehicle, or EV, fleet won’t grow fast enough to displace much in the way of fuel demand, according to Exxon Vice President Jeff Woodbury. Plus, heavy-duty trucks and petrochemicals are where the real action is anyway, he said during a conference call with analysts on Friday.

“By 2040, the fleet is about 6 percent EV,” Woodbury said, referring to a company forecast on the growth of electric cars. Even if you boosted that number by 50 percent, it would only remove about a half-million barrels a day in demand, he said, “not substantial when you think about overall oil demand of over 100 million barrels per day, at that point.”

Should gasoline demand dry up some day, that’s OK with Exxon too. The company would rather “upgrade” those molecules into higher-profit fuels such as diesel anyway, he said.

About Bloomberg NEF

Bloomberg NEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.

Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.
 
Sign up for our free weekly newsletter →

Want to learn how we help our clients put it all together? Contact us